With each project, there are many uncertain values that must be considered when you are in the development stage. Risk Management is an essential element that you must control in order to bring your project in on time and within budget. Values such as costs, resources, dates and durations can all affect the outcomes of timelines and final budget expenditures. So, it makes sense to analyze the risk, identify any potential threats to the project and then assign adequate resources to manage the risks.
Tools of the Trade
There are several important tools that are frequently used to quantify the risks. One such program is “Monte Carlo” simulation which provides information about the project and the likelihood that it will be completed on budget and in a certain time frame. The power of the Monte Carlo simulation is the picture of the possible outcome it will create.
With reports, charts and graphs, management can easily see the possibilities and can then allocate manpower or other resources toward minimizing the impact of the risk on the project
Risk Register (Qualitative Risk Analysis)
We have developed a Risk Management database (see Myriad™) that facilitates complete analysis by outlining the following steps:
Monte Carlo Simulation (Quantitative Risk Analysis)
Monte Carlo simulations can quickly and easily provide probabilistic outcomes for:
- Estimated Cost
- Budgets and Projected Cost (Forecasting)
- Determining Contingencies and Management Reserves